Assessing economic damage of Baltimore bridge loss
▶ Port indirectly employs more than 100,000 people and imports 51 million tonnes of cargo
Experts are trying to gauge how US regional and global supply chains will be affected by the collapse of Baltimore’s Francis Scott Key Bridge on Tuesday.
The 2.6km bridge over the Patapsco River, which is a major transport hub for the US East Coast and entry point to the Port of Baltimore, was badly damaged when a cargo ship crashed into a support column in the early hours.
Two people were killed, with four others still missing.
Transport Secretary Pete Buttigieg said it “will not be quick, or easy, or cheap”, to repair the bridge that opened in 1977 – noting that it took five years to build.
Maryland Governor Wes Moore on Tuesday stressed the economic impact after the collapse, saying the port indirectly employs more than 100,000 people and imports about 51 million tonnes of foreign cargo.
More vehicles and agricultural equipment pass through Baltimore’s port than any other in the US, Mr Moore said.
“Between $100 million and $200 million of value comes through the port every day and about $2 million in wages are at stake every day and that’s one of the areas we’re most concerned about,” Mr Buttigieg said.
The port is not the largest on the East Coast but it is closer to the Midwest region – known for its vehicle production – than any other and effects on the industry could last for months.
According to the Maryland government, it is the ninth largest US port for processing international cargo.
But many experts say while it is sure to have an effect on the economy of Baltimore and the state, the loss of the bridge is unlikely to have a large impact on the wider US economy.
“We don’t anticipate that the disruptions to trade or transportation will be visible in US GDP [gross domestic product], and the implications for inflation are minimal,” independent economic advisory company Oxford Economics said.
It said that while “there will likely be some temporary disruptions to certain industries, including car makers”, they would probably do little to affect the overall economy.
“A prolonged disruption could lengthen delivery times more than we anticipate and … leave a mark on our US supply chain stress index via the transportation or pricing,” the report said.
The port has become increasingly important to US retailers and manufacturers seeking to diversify their supply networks and bring goods closer to customers, Jonathan Gold, a vice president at the National Retail Federation, told AP.
“Everybody is trying to figure out the impact of the supply chain,” said Mr Gold.
Port of Baltimore is also one of the biggest US ports for coal exports and also exports of liquefied natural gas to Europe.
The bridge collapse is a “stark reminder” of the fragility of US infrastructure, said Christian Roeloffs, co-founder and chief executive of online logistics platform Container xChange.
“As we navigate the aftermath, we are reminded that the container logistics industry centres around the critical need for robust risk management and resilience in supply chain operations,” said Mr Roeloffs.
“This incident serves as a reminder that infrastructure vulnerabilities can lead to disruptions, and being prepared with flexible, adaptive strategies is essential for maintaining continuity in the face of challenges.”
The collapse comes amid rising pressure on shipping, as attacks by Houthi rebels in Yemen force ships to take longer routes around the Cape of Good Hope to avoid the Red Sea.
Last weekend, a Chinese commercial ship crossing the area was hit by a barrage of missiles from the Iran-backed group. This, plus continuing bottlenecks
Some experts say this will have an effect on Baltimore but is unlikely to have a big impact on the wider US economy
in the Panama Canal, could lengthen delivery times and increase companies’ costs.
“The pause in maritime traffic at the Port of Baltimore adds one more point of pressure for trade in the region,” Simona Stan, professor of marketing at the University of Montana, wrote in The Conversation.
“This may lead more shippers that have a choice to send more freight through West Coast ports, which have not suffered much from the Red Sea attacks and Panama problems.”
However, the fallout will be temporary, she said.
“From a supply chain perspective, this was a freak accident,” said Ms Stan.
“It’s dramatic, it’s graphic, and it forces people to pay attention to the issue.”